Class 2 NIC contributions - close to retirement

Jeffers44

Hi, I'm self-employed and close to retirement but don't quite qualify for a full state pension, as in previous employment I was opted out. No one I've spoken to has been able to answer this question yet so hopefully someone here can help.

My state pension forecast says that if I continue to pay my NIC until my retirement date my pension forecast is x amount. But as I am self employed and do self assessment my tax/NIC for the year prior to my retirement is not due until the January after I retire and the tax/NIC for the year that I retire is not due until the January after that (approximately 16 months after I retire). Would this be taken into account or could I potentially lose two years of my pension as the NIC was not paid before my retirement date?

I don't have a large income through self-employment but I always pay Class 2 NIC but rarely qualify to pay Class 4 NIC.

I'd be grateful for any advice.

QrizB

The deadlines for filing and payment are just that, deadlines.

You can file your tax return before the deadline, then pay your tax & NI before your state pension age.

I filed my return for 2021-22 in June.

Albermarle

Hi, I'm self-employed and close to retirement but don't quite qualify for a full state pension,

You can normally buy extra years . If you can this is extremely good value for money and is normally a 'no brainer'

You should contact these people and they will tell you exactly what is possible.

Contact the Future Pension Centre - GOV.UK (www.gov.uk)

Jeffers44

QrizB said:

The deadlines for filing and payment are just that, deadlines.

You can file your tax return before the deadline, then pay your tax & NI before your state pension age.

I filed my return for 2021-22 in June.

Did that work? I was intending to do that as soon as I could after the new tax year started, but someone I was talking to told me that they thought it should work, but they weren't sure how the DWP systems operated.

Secret2ndAccount

Jeffers44 said:

QrizB said:

The deadlines for filing and payment are just that, deadlines.

You can file your tax return before the deadline, then pay your tax & NI before your state pension age.

I filed my return for 2021-22 in June.

Did that work? I was intending to do that as soon as I could after the new tax year started, but someone I was talking to told me that they thought it should work, but they weren't sure how the DWP systems operated.

Agreed. I paid my NI in January for 20/21 and that's still not showing on my NI record. I'm sure it will show up eventually though.
I'm pretty sure that the tax year in which you hit State Pension Age doesn't count as a qualifying year, so if you are paying Class 2 voluntarily, that's not worth doing in the year after you retire as you describe. I can't find a link to prove it right now; maybe somebody else can confirm I've got this right.
If you were contracted out, and have been paying NI regularly, it is possible that you just can't get to enough contribs for a full SP. However, if there are gaps in your record it is well worth following Albermarle's advice and enquiring to see if they would build up more pension for you. What you pay vs what you get is a very good deal.